Essay on Case Study – Activity – Based Management in Shell Gabon

1448 Words Oct 3rd, 2011 6 Pages
Case Study – Activity – Based Management in Shell Gabon
Case Requirements
1. SG TOTAL UOC per barrel = $140,640,200/(120,000 barrels/day * 365 days/year) = $3.21/barrel
Barrels of oil produced is a cost driver for some of the activities in RDS, but not all are driven by production of oil. UOC = Total Operating Expense (OPEX) excluding exploration, depreciation, and depletion therefore there are other activities like exploration, new capital equipment for exploration, research and development, depreciation on equipment, and depletion are costing money whether you are making oil or not.
RDS is monitoring costs per barrel and SG assembled the CLT team to learn how to control costs in order to get funding for off shore oil exploration
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$ 0.017 | | | | Provide IT and Telecommunications Services | | | Select, install, operate, support hardware and software | $ 1,499,000 | $ 0.034 | Provide SAP support | $ 1,074,000 | $ 0.025 | Provide Telecommunications | $ 5,421,000 | $ 0.124 | Total | $ 7,995,000 | $ 0.183 | | | | Provide Financial Services | | | Manage Funds | $ 1,192,000 | $ 0.027 | Execute Accounting | $ 1,037,000 | $ 0.024 | Provide Financial Reports | $ 683,000 | $ 0.016 | Provide Specialist Services and Reports | $ 997,000 | $ 0.023 | Total | $ 3,909,000 | $ 0.089 | | | | Perform Internal Audits | | | Assess Risks | $ 75,000 | $ 0.002 | Prepare Mitigation Plans | $ 75,000 | $ 0.002 | Document Internal Controls | $ 50,000 | $ 0.001 | Develop and Implement Controls | $ 100,000 | $ 0.002 | Audit Balances and Controls | $ 225,000 | $ 0.005 | Provide Advice | $ 50,000 | $ 0.001 | Total | $ 575,000 | $ 0.013 | | | | Prepare Economic Plans | | | Update Review Portfolio Opportunities | $ 175,000 | $ 0.004 | Update Review Hydrocarbon Resource Plan | $ 175,000 | $ 0.004 | Prepare Update
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